Tubberware Brands (NYSE: TUP) was one of the biggest losers on Wednesday as the company reported worse-than-expected financial results. With retail brands across the country continuing to struggle, the once strong direct-to-consumer company warned investors that sales figures were going to plunge significantly in the upcoming months.
For the entire year, Tupperware now expects sales to fall between 8% and 10%, a further downgrade from previously bearish estimates which predicted sales would decline by around 6%. CFO Cassandra Harris spoke in a conference call with analysts where she alluded to possible “strategic actions” regarding Tupperware’s beauty business. While it’s unclear what exactly this could entire, it wouldn’t be surprising if Tupperware decided to sell its beauty business entirely to help raise cash and mitigate its financial shortcomings. Overall, its beauty business was hit with a $17.5 million impairment charge, leading to an 80% decline in earnings for the quarter.
“Sales for the third quarter ended in line with our forecasted guidance as the challenging trends we’ve been experiencing in Brazil, China, and US & Canada persisted as we expected.” said Tricia Stitzel, Chairman and CEO of Tupperware Brands. “Profitability was adversely affected by accounting reserves related to our Fuller Mexico beauty business and adjustments to our tax provision. We are moving forward with great urgency to prioritize opportunities in how we go to market, cost structure, and cash flow management to drive near-term results so we can navigate the current landscape successfully without sacrificing our long-term objectives for our business. We remain committed to ensuring Tupperware remains competitive – both today and for the long term – while delivering sustainable shareholder value.”
At this point, the situation regarding Tupperware remains quite dire. This is the eighth straight quarter where the company reported a decline in sales, with the company’s stock falling by around 70% over the past year. Weak consumer spending in areas which were historic growth drivers, such as China and Brazil, have also played a major role in hurting the company’s sales.
Shares of Tubberware ended up falling 34.6% over the course of the day in response to the news, hitting both a new one-year low and a five-year low as well. Overall, prospects for the company seem to be at an all-time low as retail brands continue to struggle in the current market climate.
At the moment, most analysts covering the company are either neutral on the stock or have a bearish outlook. However, this was before Tupperware posted its Q3 financial results, so it wouldn’t be surprising if even more analysts downgrade the stock to a sell rating.
Tupperware Company Profile
Tupperware Brands Corp manufactures and sells a variety of kitchen, home storage, and beauty products. The firm sells food preparation, storage, and serving products as well as cookware and microfiber textiles under the Tupperware brand name. The company also sells beauty products that include skin and hair care products, cosmetics, fragrances, jewelry, and nutritional products.
The company’s products are sold through the direct-to-consumer channel via an independent sales force outside of traditional retail store locations. The firm organizes itself into five segments based on geography and product: Europe, Asia-Pacific, Tupperware North America, Beauty North America, and South America. More revenue comes from the Asia-Pacific region than any other geographic region. – Warrior Trading News
